What are DTC sales and should I switch to them?
In recent years a number of high profile companies have stepped away from Amazon to focus on Direct To Customer (sales).
Among those have been Nike and Ikea, and other smaller but well respected brands have followed suit since.
But why would you remove yourself from the world’s biggest online shopping site and is it something that smaller businesses should consider?
Thompson and Holt managing partner Stuart White looks into the matter. White explained: “Amazon is obviously a huge selling platform, no matter whether you are a new start-up business or Nike. It has reached that size because customers trust it, it has a single-day delivery system and a huge catalogue of diverse products.
“But there are downsides as well. Significant fees, massive competition and the prioritisation of sponsored products are just a few of those. Then there is the uncertainty of having your listing removed at any time - something Thompson and Holt can help with if it happens to you.
“Still, jumping from Amazon is a major move for just about anybody, and there is a lot to consider about focusing purely on DTC sales. Trying to combine them both also has its issues - your Amazon sales could effectively cannibalise those on your own site, where marketing efforts can be high cost and yield little reward if consumers prefer to buy on Amazon.
“Going out completely on your own makes working for sales harder. On Amazon, customers know they are going to a trusted source and if you’ve positioned and priced your listings well, you have a good chance of securing sales.
“Using your own DTC sales, you need to attract potential customers to your shop front which can be expensive and you don’t have that element of long-term trust that Amazon does.
“That said, there are ways to use Amazon to engage with customers that are within their rules. Email and text messaging are two ways of doing that, using schemes like free products, registering lifetime warranties or inviting them to be part of exclusive content clubs. Test a number of different options and see which ones work best for you.
“Taking steps such as these builds a relationship with customers, and should you decide at some point to focus on DTC sales, this will help you make the switch. It also won’t affect your Amazon sales, instead it’s more likely to strengthen them.
“Similarly, doing everything to make sure your reviews are as strong as possible will only benefit you no matter where you decide to sell in the future. You can always use those reviews to advertise and showcase your products outside of Amazon, and they are seen as being trusted by most consumers. Offering coupons to buy directly from your website is another option to consider.
“Making the switch to completely DTC sales is undoubtedly a big one, but you can put some of these measures in place to gauge whether it would be successful for your business. It is possible to secure high quality customers from Amazon and take them with you, where there is more freedom for your business to present your products the way that you want to.
“But there is risk involved, it isn’t for every business and it’s not an overnight decision. As always at Thompson and Holt, we would recommend doing as much research as possible and applying it to your own business’s specific situation before making a final move.”
If you have found yourself suspended while selling on Amazon, contact Thompson and Holt for a free LiveChat to get your Seller business back online as quickly as possible.